Argentina farm strike strengthens, trade disrupted

By Hilary Burke

BUENOS AIRES, March 26 (Reuters) - Argentina's government said on Wednesday it would forcefully clear road blocks to get goods to market as a two-week-old farm protest against new taxes gained momentum.

Thousands of people nationwide rallied against the government and in support of the crucial agricultural sector on Tuesday night as the strike squeezed supplies of meat and dairy products in supermarkets.

"If they don't move, we'll move them ourselves," Justice Minister Anibal Fernandez told local television, referring to road blockades throughout Argentina's farming heartland.

Several suppliers of Argentine soy and soyoil declared force majeure on cargoes to China due to the protest, following a similar move on soymeal shipments to Europe, according to traders and industry officials.

While U.S. and Brazilian soy products can plug some holes, they cannot fully replace goods from Argentina, which is one of the world's top suppliers of soy, corn, wheat and beef.

Farm leaders vowed to continue the strike as long as necessary, demanding that the government repeal a new sliding-scale export tax regime that raises levies on soy and sunflower products at current prices.

The tax hike is the latest move to anger farmers in a prolonged confrontation with the center-left government, which has used export bans and price controls on farm goods to help tame inflation and boost state revenue.

"We're not afraid. We're staying here indefinitely," Alfredo de Angelis, a local leader of the FAA farm group, said at a road blockade in Entre Rios province.

President Cristina Fernandez slammed the strike on Tuesday, saying the export taxes were aimed at redistributing wealth in a country where nearly a quarter of people are poor. She vowed not to give in to "extortion."

Pot-banging protesters took to the streets of Buenos Aires to support the farmers, scuffling on Tuesday night with pro-government leftist activists outside the presidential palace.

Some farmers dumped milk on the highway to show their disdain for government policies, while others burned old harvesting machines.

Baby formula has gone missing at some Buenos Aires stores, while pricey rabbit meat was the main meat on offer at a premium supermarket in the suburbs.

Economy Minister Martin Lousteau told local television: "The government will take the necessary measures to ensure there are no shortages. We have to guarantee people's food supplies."

"The larger discussion is how profits are distributed. And in this particular context, how mega-profits are distributed. Every country in the world is dealing with this issue," he added.

(Additional reporting by Lucas Bergman and Maximilian Heath; Editing by Kieran Murray)

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